Frances M. Rosarius

B-265606 Jul 02, 1996 Jump To VIEW DECISION RELATED PAGES GAO CONTACTS Highlights Who also was a licensed real estate agent employed by a real estate firm. Contracted with the firm to have it list and sell her residence at the old duty station and to pay the firm a 6 percent real estate commission. Arranged to have the employee handle the residence sale on its behalf. The employee and her husband were charged and paid the 6 percent commission to the firm. Her claim for reimbursement for the commission paid was reduced by the amount of the fee paid her by the firm. Are separately enforceable. Who is appealing Claims Settlement Z-2869355. That settlement disallowed that part of the brokers' commission paid the real estate firm that was equal to the amount she received from the firm as the sales agent for selling her own residence incident to a permanent change of station in May 1994. View Decision Matter of: Frances M. Rosarius File: B-265606 Date: July 2, 1996 A transferred employee, who also was a licensed real estate agent employed by a real estate firm, contracted with the firm to have it list and sell her residence at the old duty station and to pay the firm a 6 percent real estate commission. In addition, the firm, by separate agreement, arranged to have the employee handle the residence sale on its behalf. Following the sale of the residence, the employee and her husband were charged and paid the 6 percent commission to the firm, which in turn compensated the employee for her sales services. Her claim for reimbursement for the commission paid was reduced by the amount of the fee paid her by the firm. She appeals that ruling. Under applicable laws of the jurisdiction involved, the legal relationship between the parties regarding the commission paid for the sale of the residence, on one hand, and the relationship between the employee and the firm regarding payment of compensation for her performing the sales services, are separately enforceable. Therefore, since the employee incurred a legally enforceable debt, the full 6 percent real estate commission may be reimbursed to her. DECISION This decision responds to correspondence from Ms. Frances M. Rosarius, who is appealing Claims Settlement Z-2869355, Nov. 7, 1994. That settlement disallowed that part of the brokers' commission paid the real estate firm that was equal to the amount she received from the firm as the sales agent for selling her own residence incident to a permanent change of station in May 1994. We conclude that the full real estate brokers' commission paid the real estate firm may be reimbursed, for the following reasons. BACKGROUND Ms. Rosarius, an employee of the Department of the Army stationed at Tooele Army Depot, Utah, was transferred to the Corpus Christi Army Depot, Texas, by travel orders dated April 18, 1994. She reported for duty at her new station on May 31, 1994. In addition to her federal employment, Ms. Rosarius also held a license as a real estate agent and was employed by Wardley Better Homes and Gardens (Wardley), a real estate firm in the Tooele Depot area. The file shows that she and her spouse contracted with Wardley to sell their residence, with Ms. Rosarius to act as the selling agent for Wardley. The employee and her husband sold their residence and went to settlement on May 19, 1994. As the sellers, they were charged and paid Wardley a 6 percent real estate commission ($4,920) on the sale. The Army disallowed reimbursement of that amount due to the uncertainty regarding Ms. Rosarius's status as the employee/seller of the residence and as agent on the sale. On appeal here, we ruled in settlement Z-2869355, Nov. 7, 1994, that she was entitled to be reimbursed for that part of the commission paid Wardley that was in excess of the fee that she received from Wardley as the selling agent. Ms. Rosarius appeals that settlement and seeks reimbursement for the full commission she and her husband paid to Wardley. OPINION The authority for the reimbursement of real estate expenses is contained in 5 U.S.C. sec. 5724a(a)(4)(A) (1996), and Part 302-6 of the Federal Travel Regulation (FTR). [1] Section 302-6.2(a) of the FTR provides that the brokers' fee or real estate commission paid by an employee for services in selling his/her residence at the old duty station is reimbursable, but not in excess of rates generally charged in the locality of the old official station. [2] In interpreting the statute and the regulation, we have held that a brokers' commission may be reimbursed only where the employee has incurred a legally enforceable obligation to do so. [3] We look to state law to determine whether the payment obligation claimed by the employee is legally enforceable.